EBRD helps improve private health care in Montenegro

by Nobuko Ichikawa & Matthias Loening

The EBRD is helping Montenegro’s largest private hospital provide better care for mothers and babies and bring its overall quality, safety and ethical standards up to international levels with a €1 million loan.

The loan to Codra Hospital in Podgorica, disbursed in April, was used to fund a new maternity ward and for delivery/neo-natal services and post-delivery care for mothers and their babies. The project is a first for the Bank in the health sector in Montenegro and only the second in this sector in the Western Balkans.

Founded in 2001, Codra was the first private health care provider in Montenegro. Since then, Codra has grown to become the largest private hospital in Montenegro, providing a range of diagnostic, outpatient and inpatient services, many of which are not provided by other health institutions, including state-owned hospitals. Codra is considered to have the best facilities and medical personnel in Montenegro.

As part of the EBRD’s due diligence process, significant attention is paid to the existing standards of health care services of a project. For Codra Hospital, the Bank contracted a consultant, KFL Associates LLP, to carry out an independent hospital audit.

This audit is based on IFC’s Self-Assessment Guide for Health Care Organizations, which was devised jointly with the Joint Commission International (JCI), the pre-eminent international accreditation agency to assist health care organizations to reach “international standards” of quality and patient safety.

For private health care providers, the consequences of poor standards of quality, safety and ethics can be disastrous. Ethical and responsible conduct is not only important for public relations, but also a necessary element in risk management. The reputation of a health care organisation is critical in influencing patients’ choice in seeking services.

Hospitals with good reputations also benefit from high staff retention and recruitment of the most qualified professionals. Quality improvement is linked to better performance as boosting quality tends to reduce costs.

From the EBRD’s perspective, when we finance health care organisations, we have a stake in the reputation of our clients’ commercial performance and their values and standards.

Furthermore, we have seen that a commitment to high standards of quality, safety, and ethics not only makes good commercial sense but also links to transition – bringing health care services up to international standards.

This hospital audit was the first of its kind for the EBRD in Montenegro. Furthermore, it was the first independent hospital audit experience for Codra Hospital and likely the first in the market. Overall, Codra Hospital scored 67 per cent (a reasonable score) against the Assessment criteria.

“Though our infrastructure and services are perceived to be the best in Montenegro, the quality audit is helping us to bring Codra more in line with international standards,” said Mr Zoran Ivanovic, the hospital’s CEO.

“We strive for continuous quality improvement and to ensure that our hospital has the systems in place that will help us move forward from the current business to one that is providing even wider range of medical services.”

Based on the audit result, an action plan was developed and agreed with Codra Hospital, aiming to achieve cultural change and transformation of the organisation, its staff and leadership. The Bank is also requiring Codra to report their implementation of the Action Plan in its annual report and to carry out a follow-up hospital audit every three years during the Project cycle.

The EBRD’s experience with quality assurance audits to date is that our clients are very good at following national health care standards and regulations (likely a positive legacy from previous times).

In health care, however, just following the local standards, having the latest technologies and the most prominent doctors on staff is not enough. Local standards are often well behind international standards in terms of quality assurance. New technologies and techniques ( for example, minimally invasive surgeries) are constantly changing, requiring a continuous development in quality standards.

The EBRD’s role in conducting these audits not only provides an important risk mitigation tool, but also links to our role in transition by bringing health care services to international standards and improving the broader health system.